When the coronavirus pandemic first struck, leaders at vacation rental giant Vacasa hoped that travel “would bounce back when the shelter in place mandates started to lift,” CEO Matt Roberts said.
And in the months since, it actually did bounce back in a very big way.
Matt Roberts
“It came roaring back,” Roberts said. “The shoulder season is not a shoulder any more.”
Roberts — who joined Vacasa in February — recently spoke to Inman via phone to discuss the state of the short-term rental market and what to expect in the coming months. And the ultimate takeaway from the conversation is that despite the overall economic chaos of the coronavirus pandemic, the short-term rental industry is actually doing quite well at the moment.
That doesn’t mean all destinations are thriving equally, or that business has reached a pre-COVID equilibrium. But it does mean that investors, owners and managers can expect to financially survive in the near term future.
Here are the key takeaways from the call with Roberts:
Preferences are changing
One of Roberts’ more surprising observations about the market is that — despite the weather getting colder in much of the U.S. — ski destinations are lagging behind other regions in terms of consumer interest.
“Currently, ski markets are down as much as 60, 70 percent,” he said, pointing to still-unanswered questions about when resorts in places like Colorado and Utah will actually open to guests.
On the other hand, other types of destinations have seen surging consumer demand.
“In non-ski markets throughout the country, our year-over-year bookings continue to be up,” Roberts added.
That said, Vacasa is still growing its portfolio of properties across the U.S., Roberts said, including in ski destinations. The company also continues to see interest among real estate investors for second homes that they may use in the immediate future but which could also be rented out down the road.
There are two other noteworthy shifts in consumer preference. First, travelers are booking their stays in rental homes more last minute. This is a shift that others have observed during the pandemic, but it’s significant now because it’s colliding with the holiday season, when travelers traditionally make plans well in advance.
The other shift is that travelers are booking longer stays, which Roberts attributed to ongoing remote work and virtual school options.
Adoption of short-term rentals is accelerating
There’s an open question as to how much of what’s going on right now in the short-term rental market is permanent, and how much will go back to “normal” whenever the pandemic ends.
For his part, Roberts believes that while some behaviors might go back, the pandemic has ultimately accelerated the adoption of vacation rentals, as opposed to traditional hotels.
“I think this whole thing has exposed people to the value and convenience and attractiveness of vacation rentals, and that part is going to stick,” he argued.
In other words, the industry was already seeing a shift away from hotels and toward rental homes and home-like properties even before the current outbreak. But the ongoing crisis is making that shift more pronounced, and Roberts doesn’t see that going away. That means its likely to continue to be a good time to own a short-term rental, but hotels may be playing defense in the future.
“What you see is a meaningful acceleration of that because of the pandemic,” Roberts said.
Property owners should look for ways to “delight and surprise”
Consumers may be flocking to vacation rentals, but as the sector has evolved so have those consumers’ preferences. Roberts said that the people renting houses today expect a more “hotel-like” experience, and he urged property owners who want a competitive advantage to make sure they are “looking for opportunities to surprise and delight.”
Roberts understandably believes Vacasa itself goes a long way in helping owners do that. The company manages properties on behalf of owners and can take care of things like cleaning, legal issues and more. The firm also has data resources for agents and owners so they can see what kind of return they should expect on their investments.
But either way, Roberts also said being a good owner-host means “listening and being attentive to what the guests needs are.” He specifically mentioned paying attention to things like home decor, having clean white towels and other amenities.
“Make sure that you’re doing the basics really well,” he added.
